City settles sewer lawsuit
The city recently agreed to pay nearly $1 million to settle a sewer repair lawsuit that has lingered like a green cloud over City Hall for three and a half years.
The whole stink began in January 2000, when city officials realized the lining inside four of six sewer pipe segments U-Liner had finished work on was not made of the smooth material they expected.
“It’s not pretty to imagine, but if there are wrinkles and folds and fins, things can get caught up,” said Deputy City Attorney Lance Gams. “And that can cause there to be a need for greater maintenance.”
City officials pulled U-Liner off its $450,000 portion of the $6.7 million overhaul, which was being done to correct damage done in the 1994 Northridge earthquake.
But U-Liner, which said the work was performed adequately, fought back.
The company sued Clarke Contracting — which was responsible for the entire $6.7 million contract — in June 2001 for the cost of replacing the lining, the balance of its contract, plus attorney fees and costs.
U-Liner convinced nine of 12 jurors in October 2002 to force Clarke to pay the original amount of the contract between the two companies.
In their finding, jurors didn’t necessarily agree that the work was performed as promised, but felt U-Liner should at least have been given the opportunity to sand down the imperfections and complete the job, Gams said.
Clarke Contracting, in turn, took aim at the city.
It then counter-sued for the full U-Liner claim, plus its own attorney fees and costs, saying the city should be responsible because it mandated that U-Liner be taken off the job.
City officials didn’t back down.
“Look we paid for a new project and we didn’t want one that’d been compromised,” Gams said. “We paid for brand-new lining that was supposed to be smooth — and it wasn’t.”
In a February 2003 ruling by Santa Monica Superior Court Judge Terry Friedman, the city was found responsible for all U-Liner’s claims against Clarke Contracting, plus nearly $175,000 in lawyer fees and costs.
The total out of pocket for the city was $794,000, plus any interest accrued after the Feb. 27 judgment. But rather than pay, the city filed an appeal, which was met by a cross-appeal by Clarke.
In the end, Gams was able to fashion a deal with John Clarke, owner of Clarke Contracting, to accept a portion of the interest he was owed for a total of $810,000.
“We finally were able to reach the resolution that everybody wanted to reach,” Gams said. “The appeals will be dismissed and the case will be closed.”
As part of the agreement, Clarke also agreed to pay $11,500 to a business that hired its own workers to mend its connection to the sewer line Clarke Contracting was working on.
“I just wanted to show some good faith to the city,” Clarke said Thursday, adding that the incident probably would not preclude him from hiring U-Liner again. “I wanted to settle this and be done with it. I’m not mad at the city but I wish it’d never happened. We could have spent our time better.”
“I’m not mad at the city but I wish it’d never happened. We could have spent our time better.” — — JOHN CLARKE Clarke Contracting
Santa Monica City councilmembers in a closed session last month gave the final approval to pay the money and put an end to the legal wrangling.
“The city felt that the contractor wasn’t entitled to the money the contractor probably was entitled to,” said Mayor Richard Bloom. “The bottom line is it’s behind us.”
The job in question covered 6,000 feet of 12- and 18-inch sewer pipes on Colorado Avenue and Stewart and 26th streets.
Originally published in the Santa Monica Daily Press print edition on July 11, 2003. Read the original PDF.